I have two rental properties. One needed a new central A/C (~$5700) so that was filed as an improvement to be depreciated over 27.5 years.
The other rental needed a new appliance last year (~$750) so I'm thinking that would probably be filed under appliance to be depreciated over 5 years. However TurboTax is prompting me to see if I can deduct this as an expense with:
"This is an annual election that lets you deduct these items as expenses rather than depreciating them over multiple years. Keep in mind this election will be applied toward all of your businesses, rental properties, and/or farms so factor those in too.
You can do this if:
-- You have a consistent process for how you record expenses and assets.
-- The cost of some items, as shown on your receipts, is $2,500 or less.
Do both of these apply to you?"
The part I am hung up on is "this election will be applied toward all of your rental properties"
Does selecting this somehow interfere with the A/C capital improvement? Or does this standalone as just expensing the $750 appliance for the other property.
The annual election to expense items under $2,500 applies to all of your rental properties, but it does not interfere with capital improvements like your $5,700 central A/C.
Here's how it works:
The annual election to expense items under $2,500 applies to all of your rental properties, but it does not interfere with capital improvements like your $5,700 central A/C.
Here's how it works: